The cloud has revolutionized the business segments worldwide and the pandemic acted as a catalyst in giving cloud computing a kick as organizations moved to the cloud instantly.

In 2023, the global public cloud services market is expected to grow by approximately 21.7 percent, which amounts to about 597 billion U.S. dollars.

But as the cloud gave a lot of advantages, there were certain gray areas too. Organizations were not capable of gaining accurate insight into the usage of the cloud and hence cloud pricing and complicated cloud settings created problems.

Enterprises jumped into cloud computing without detailed analysis, especially concerning the costs involved. Business owners failed to forecast costs and did not do thorough budget and resource allocation to manage cloud services.

And that is where the inflation began in the cloud. That is what is termed Cloudflation.

Just like there is inflation in our daily components like groceries, gas, rent, etc., the cloud computing arena felt the jolt of inflation.

The three tech giants in the area of cloud computing – AWS, Google Cloud, and Microsoft Azure have been facing rising prices to combat inflation and to maintain profitability.

As the term explains, Cloudflation is the inflation faced in the cloud. It points towards the rise in the cost of cloud-based services wherein the major cloud service providers have been increasing their prices to accommodate their expenses and increase their revenue.

This article investigates the different factors that have led to Cloudflation and the possible recommendations that can keep it under control.

Important Factors Affecting Cloudflation

Why is Cloudflation occurring? What are the major reasons for its spread?

Let us have a look at the significant factors that are leading to the cloud havoc:

• Poorly Designed Cloud Architecture

If organizations do not design their cloud architecture properly, there is bound to be inefficacy and chaos during its execution. It may lead to extra costs, extra resource usage, the duplicity of data, and poor data management.

• Understanding Usage Patterns Wrongly

Sometimes, organizations find it difficult to understand the requirement of resources and their usage in a precise manner. This leads to wrong estimations about data growth and hence upheavals in the implementation part.

• Soaring Prices of Energy

Since the storage of cloud resources and servers need a lot of energy, any type of increase in energy costs can lead to Cloudflation. Even political crises and tension can lead to energy crises and thereby disturb the cloud execution balance.

• Supply Chain Issues

There could be increasing issues in the supply chain industry that supplies most parts of the cloud infrastructure devices. This could lead to a shortage of hardware devices and thereby, disturb the smooth execution of the cloud industry.

• Overestimation of Resources

Organizations sometimes, tend to overestimate cloud resources and hence encounter huge cloud wastage. It could include over-ordering of resources, dearth of maintenance, lack of optimization of data, etc.

Key Steps to Reduce Cloudflation

However strong the challenges are, there are modern ways and means to overcome them and achieve good results. Here are certain major steps that can be taken to lessen Cloudflation:

• Remove Unwanted Resources – Certain resources may not be needed anymore and could be leading to extra costs. Such resources should be taken care of and handled well not to increase the cost burden.
• Establish Strong Connect Between IT and Finance – Having a collaborative relationship between IT teams and Finance teams can keep everyone aware of any kind of misjudgment or poor forecasting and have them on guard.
• Utilize Tools and Competent Systems for Optimization – Make use of the cloud provider’s tools and best practices to avail seamless, optimized, and effective cloud-based experience.
• Optimization of Data Storage – Make the best use of cost-effective storage options like data archiving and occasional data storage so that the costs involved in storage mechanisms are controlled regularly.
• Enhance Cloud-Related Purchasing – Companies must try to estimate and analyze the cloud infrastructure purchases to optimize their resources and reduce on wastage of resources or unnecessary costing.
• Go In for Right-Sizing and Avoid Overestimation – A proper estimation must be done for cloud-based resources with the correct sizing of enterprises so that an accurate purchase can be done, and overprovisioning can be avoided.
• Abide By Strong Cloud Governance Policies – It is vital to follow government standards and policies for abiding by cloud-based services, to ensure a perfect implementation and avoid any kind of wastage or overestimation.
• Find Out Duplication and Optimize Funds – It is important to analyze using modern-day tools if the cloud infrastructure, funds, resources, and architecture are being optimally used or if is there duplication and redundancy around.
• Implement a Primary FinOps Strategy – Go in for a basic financial and operational strategy that can include fundamental calculations of cloud costs involved, controlling factors, and futuristic actions.
• Adapt Automation Techniques – Automation is the key for all types of organizations, for availing the cloud resources at their optimum and in the most affordable range. This will empower increased scalability and reduce wastage.
• Implement Auto Scaling – Automatic adjustment of resources and auto-scaling, depending on the workload is preferred for the right proportion of resources so that there is no over-provisioning of the same.
• Review Costs Frequently – Perform a routine review of costs involved, infrastructure, resources, architecture, and cloud-based components to ensure that there is no overspending and find areas of betterment.

As We Wind Up

The cloud and its advantages are an indispensable ingredient in the success of any business. Its benefits are necessary however many costs rise and cause Cloudflation. As businesses grow and expand, there is more movement to the cloud, and hence business stakeholders must keep a stringent eye on the total budget allocated, and its usage and ensure that Cloudflation does not go beyond control.

It is not only the IT department’s purview, but the entire strategic leadership must focus hard on avoiding misuse of cloud-based services. Digitalization must not take a back seat and projects must be accomplished on time, with full efficacy.

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